Record opening six months for Norwegian seafood trade despite falling volumes
In the first half of this year, Norwegian seafood companies exported 1.3 million metric tons (MT) of fisheries and aquaculture products worth a record NOK 51.2 billion (USD 6 billion, EUR 5.3 billion). But while the H1 2019 value represented an increase of 7 percent, or NOK 3.1 billion (USD 363.3 million, EUR 321.9 million) year-on-year, the volume declined by 13 percent.
According to the Norwegian Seafood Council (NSC), salmon accounted for about two-thirds of the value growth in the opening six months. There was also a “decent” increase in the country’s shellfish earnings, it said. The volume decline is mainly attributed to reduced exports of blue whiting so far this year.
“Demand for Norwegian seafood remains steady, and we see better conditions of access to individual markets. In addition, the value of exports has been influenced by the currency situation, where a weak Norwegian krone has meant higher prices for exports of Norwegian seafood to euro and dollar markets,” Tom-Jørgen Gangsø, the NSC’s director of market insight and market access, said. “The sum of these factors explains a record-setting half year for Norwegian seafood exports.”
Some 506,000 MT of salmon products with a value of NOK 34.6 billion (USD 4.1 billion, EUR 3.6 billion) were exported in the first-half of this year, with the volume and value up 5 percent and 6 percent, respectively.
Poland, France, and Denmark were the largest recipients of salmon from Norway over the six-month period.
“We have seen stronger production outputs of salmon in the first-half of the year than was expected at the beginning of the year. At the same time, we have experienced a growth in demand, especially from the E.U. and Asia. The growth in demand, together with a weak krone, explains why we have also experienced price inflation, while volumes have increased,” Gangsø said.
The NSC highlighted that there has been strong growth in both the value and volume of fresh salmon exports to China this year. Overall, 12,130 MT of fresh salmon from Norway were exported to this market during the first six months, which was more than was exported throughout the whole of 2018.
“We are now seeing considerably more Norwegian salmon making its way to China,” Victoria Braathen, who is with NSC’s trade mission in China, said. “These increased exports are mainly due to improving market access in the form of more efficient trading, as well as new manufacturers gaining access to the market. On average, about 200 MT more Norwegian salmon [is] entering China each week than during the same period in 2018.”
Those market affects, if continued, will make China a destination for even more salmon in the future.
“If present trends continue, we can project that Norway will export more than 20,000 MT of salmon to China during 2019,” Braathen said. “Norway continues to strengthen its position and take an increasing share of the rising demand in the market.”
Also in the salmonid sector, Norway exported 24,700 MT of trout worth NOK 1.7 billion (USD 199.2 million, EUR 176.5 million) in H1 2019, with the volume and value 19 percent and 20 percent higher than in the corresponding period of last year.
"In addition to volume growth, there has also been a shift towards exports of fillet of trout in the first-half of 2019. We see growth in the U.S. market, where Norwegian trout is gaining ground, as a result of increased accessibility in both the retail trade and in the restaurant market,” Gangsø said. “The volume increase has led to somewhat lower prices for both fresh and frozen whole fish, but at the same time we see that fillet prices have increased. Some of this can probably be explained by the fact that the Norwegian kroner is particularly weak against the dollar.”
In the whitefish sector, with quotas down on last year, the Scandinavian country shipped 40,200 MT of fresh cod valued at NOK 1.7 billion, with the volume and value 21 percent and 7 percent lower than H1 2018, respectively. Denmark, Poland and the Netherlands were the largest recipients of fresh cod in the first-half of 2019.
Norway also exported 40,100 MT of frozen cod, also valued at NOK 1.7 billion, with the volume and value rising by 3 percent and 21 percent respectively. China, the United Kingdom and Lithuania have been the main markets for Norway’s frozen cod so far this year.
"The strong growth of frozen cod to the U.K. so far in 2019 is mainly due to two things: strong competition for the raw material, lower quotas and higher price growth, and the fact that U.K. grocery chains want to secure enough raw material due to the uncertainty around Brexit. We have also received feedback from U.K. importers that consumer demand for cod remains strong,” Hans Frode Kielland Asmyhr, U.K. director of the NSC said.
In the pelagic trade, over the past six months, Norway has exported 147,000 MT of herring worth NOK 1.3 billion (USD 152.3 million, EUR 135 million), and 81,000 MT of mackerel with a value of NOK 1.4 billion (USD 164.1 million, EUR 145.4 million). The herring volume was on par with H1 2018, while mackerel was 5 percent higher. In value terms, the herring and mackerel exports were up 3 percent and 38 percent, respectively.
Poland, Lithuania, and Egypt were the main markets for Norway’s herring exports, while China, South Korea and Japan were the largest markets for its mackerel.
"The first six months have seen an increase in exports of frozen whole herring, while we see a decrease in exports of fillets. The reason for the reduction in fillet exports is reduced demand from Germany after they bought a lot of herring last fall. Although the volumes of frozen herring have increased, prices have remained stable. Expectations of lower supply can help to explain this,” Gangsø said. “Despite reduced quotas, we see growth in mackerel exports from Norway. The fear of the consequences around Brexit has meant that British fishermen have started earlier this year, and this has resulted in increased landings in Norway. Expectations of low supply of mackerel have given rise to higher prices and so we have seen the strongest mackerel half-year ever.”
NSC’s data also confirms that 844 MT of king crab with a value of NOK 264 million (USD 30.9 million, EUR 27.4 million) were exported in January through June period, with the volume and value up 24 percent and 35 percent respectively. South Korea, the United States, and the Netherlands were the largest recipients of Norwegian king crab.
At the same time, 7,500 MT of shrimp (up 65 percent) worth NOK 552 million (USD 64.7 million, EUR 57.3 million), an increase in value of 49 percent were sold overseas, with Sweden, the United Kingdom, and Finland providing the main markets.